Back on markets, stocks slipped around the world on Wednesday and Wall St futures were in the red.
Interest rate markets were relatively calm, with Treasury yields ticking slightly lower after a heavy week of new debt sales. Subdued oil prices – despite OPEC signals on extending supply curbs – helped the bond market mood.
The futures market now tallies with the idea that the Fed was correct in December when it signalled 75 basis points of rate cuts this year. The first cut is now not priced until July when – curiously – the Fed, European Central Bank and Bank of England are now all expected to embark on cuts within two weeks of each other.
Although the dollar was higher on Wednesday, the lockstep easing expectations have kept it contained in ranges and has subdued currency volatility gauges to two-year lows.
The dollar was helped overnight by surprisingly dovish soundings from New Zealand’s central bank, with hit the kiwi dollar by almost 1%.
The Reserve Bank of New Zealand held the cash rate steady at 5.5% and trimmed the forecast peak for rates, catching markets by surprise as policymakers said the risks to the inflation outlook have become more balanced.
In companies, Apple’s stock price was firmed in Frankfurt trading after the firm cancelled work on its electric car after decade – concentrating on artificial intelligence projects instead.
Chinese markets slumped back 1%, with developer Country Garden saying a liquidation petition has been filed against it for non-payment of a $205 million loan, clouding its debt revamp prospects and undermining Beijing’s effort to restore confidence in the property sector.
